Thursday, November 9, 2006

Citibank Partners with Pay By Touch

Citibank has just raised the bar for the credit card market. .You won't even need a physical card any longer to party, dine or shop. All you will need is your finger, for a scan.

Rolling out the world's first biometric credit card service yesterday, the American bank is targeting Singapore yuppies for the launch, before extending it to the rest of its over 700,000 card members here.

With the free service, cardholders need only press their finger to a biometric scanner located at participating stores. Currently, only nine outlets offer this service but others will be roped in.

Not only can customers cut down on payment queue times, they have the added protection against card fraud, said Mr Jonathan Larsen, chief executive officer and country business manager, Citibank Singapore.

"With the credit card becoming very much a part of our daily lives, consumers want greater flexibility in making payments," he said, adding that this move will transform the local payments industry.

The global bank is also looking at using biometrics for Internet banking. Other forms of biometrics involve authentication via facial and voice recognition.

Commenting on the security of the system, Mr John Morris, president and chief operating officer of US-based technology partner Pay By Touch, said the service has "military-level encryption" to ensure data security.

To assuage fears that the data collected would be misused along the way, Mr Larsen said that the digitised fingerprints are encrypted and stored in different databases from other information like the name and card numbers of cardholders.

This keeps the information separate and prevents abuse, said the bank.

Mr Larsen declined to reveal the investment amount of its biometric service, except to say it is in the "multi-million" range. Citibank plans to roll out the platform to all it's cardholders in Singapore and then move on to Malaysia and the Mainland. They also plan to use the Pay By Touch biometric platfrom for online banking and purchasing over the Internet, which is, at the end of the day, why they are partnering with Pay By Touch in the first place.

It certainly raises the competition for a market that has seen a slew of creative concepts over the years — such as shrinking the cards by half — to woo the crowds. On whether the latest biometric system will take off, intellectual property lawyer Bryan Tan said: "It's innovative. The current card technology has flaws, as we have seen from security breaches in cloning of credit cards." But he added that its popularity would depend on acceptance by both merchants and users. Merchant's certainly have a vested interest since biometric ACH transactions cost about a third less than debit transactions, which in turn, cost about 25% less than credit card transactions.